SBC Medical Reverses Revenue Decline After Structural Reform
Second-quarter revenue was $49 million, up 13% year over year, after a 9% decline in the first quarter.
SBC Medical Group Holdings Incorporated (SBC), a medical services organization that provides management support to clinics in Japan and abroad, reported second-quarter revenue of $49 million, up 13% year over year, reversing a 9% year-over-year decline in the first quarter.
The quarter marked a clear reacceleration in growth, with net income attributable to SBC Medical of $11 million, up 335% year over year, outpacing the revenue increase. Net income margin was 22%, up 16 percentage points year over year. Basic earnings were $0.10 a share.
In the first quarter, revenue had fallen 9% to $43 million. Chairman and Chief Executive Officer Yoshiyuki Aikawa attributed that decline primarily to a strategic structural reform implemented in April 2025 that revised the franchise fee structure, and said that excluding the change, core business performance remained solid.
For the second quarter, earnings growth was supported by expansion of the points business following a change in operating policy and by expansion of service fees in line with enhanced AI-enabled support capabilities. Adjusted EBITDA was $20 million, up 32% year over year, with an adjusted EBITDA margin of 41%, up 6 percentage points year over year.
Aikawa said the company had completed the structural reforms undertaken in 2025 and was now running multiple growth engines simultaneously. He said the convergence of healthcare and AI is becoming one of SBC Medical’s next sources of competitive advantage, citing more than 26 years of accumulated management data used to support AI development, including AI-powered call centers, AI-driven marketing, and AI-assisted site selection for new clinic openings.
The clinic network continued to expand. As of June 30, 2026, locations across the support and partnership network increased by 34 year over year to 287, versus 284 as of March 31, 2026. Last-twelve-month visits from July 1, 2025, to June 30, 2026, reached 6.9 million, up 10% year over year. Average spend per visit was $287, up 9% year over year.
The AI-enabled platform is expected to drive growth across the number of clinic locations, average fee per clinic, and service-menu breadth. Through fee revisions for call-center services provided to five affiliated medical corporations, together with separate fee revisions reflecting expanded support for Rize Clinic and Gorilla Clinic, SBC Medical expects those initiatives, if their impact is realized for a full year, to increase service fees by approximately $15 million annually, converted at 158.1 yen to the dollar.
Looking ahead, Aikawa said the company will deepen its multi-brand strategy in aesthetic dermatology domestically while expanding its non-aesthetic business, which it positions as a second growth engine. Internationally, it plans to accelerate global growth through collaboration with OrangeTwist in the United States and ASEAN expansion anchored in Thailand, and it is preparing to enter the longevity market.
Cash and cash equivalents were $184 million as of June 30, 2026. The company will continue to pursue disciplined investment toward its next growth phase.
Related-party revenues were $43.7 million for the three months ended June 30, 2026, and non-related-party revenues were $5.5 million. Gross profit was $36.0 million. Income from operations was $19.0 million.